A pair of Saratoga residents who own and operate Bay Sleep Clinic are in hot water with the feds.

The Department of Justice filed a lawsuit in early September against Anooshiravan Mostowfipour and Tahereh Nader alleging that they defrauded the government.

The DOJ’s False Claims Act complaint is the second brought against Mostowfipour, 57, and Nader, 56. The government’s complaint alleges that Mostowfipour and Nader’s companies fraudulently billed the Medicare program for diagnostic sleep tests.

The initial complaint was filed in April 2012 by the law firm Constantine Cannon on behalf of Elma Dresser, a Sunnyvale resident who worked for Qualium Corp. as a sleep technician from 2002 through 2010.

Mostowfipour and Nader own Qualium Corp., which operates 14 sleep clinics, including in San Jose and Los Gatos, along with Amerimed Corp., which distributes durable medical equipment under the names Amerimed Sleep Diagnostics and Amerimed CPAP Specialists. Prosecutors allege that Mostowfipour and Nader submitted more than 14,000 false claims to Medicare for diagnostic sleep studies and durable medical equipment.

“It’s really breathtaking, the scope of the alleged fraud,” said Jessica Moore, an attorney at Constantine Cannon. “It’s multi-faceted. It’s unusual to see so many alleged ways the fraud is occurring. Hundreds of millions of dollars are spent by Medicare on sleep testing every year, so it’s a big deal. It costs taxpayers a lot of money every year. The government cares about fraud in this area.”

Both lawsuits filed by Constantine Cannon and the government allege that Mostowfipour and Nader billed Medicare for tests that were conducted at unapproved locations and performed by unqualified technicians.

They further allege that Mostowfipour and Nader obtained approval to treat Medicare patients at only two of their locations and then treated patients at all their Bay Sleep Clinic locations. Mostowfipour and Nader then falsified documents to state that the patients had been treated at one of the two approved locations, according to the Department of Justice.

The government also alleges that the pair fraudulently billed Medicare for medical devices that violate Medicare regulations prohibiting diagnostic sleep test providers from supplying medical devices and sharing a sleep laboratory location with a durable medical equipment supplier.

The initial complaint, referred to as the whistleblower action, was kept under wraps until earlier this year when the government intervened, according to Moore. The DOJ then filed its own complaint that mirrors most of the allegations made in the original complaint.

“We’re very happy to be working alongside the government for the majority of the claims against the main defendants,” Moore said.

The difference between the two lawsuits is that the original filed on behalf of Dresser includes additional claims against Access Medical Consultants, a third-party Los Gatos-based company used by Mostowfipour and Nader to submit claims to Medicare. The lawsuit also includes claims regarding alleged improper payments made to medical providers.

If the government successfully resolves or litigates its claims, then Dresser, as the plaintiff, can receive a share of between 15 to 25 percent of the amount recovered.

The investigation was conducted by the U.S. Attorney’s Office for the Northern District of California and the Office of Inspector General of the Department of Health and Human Services.